Simply give it to them. If you want to erase your personal information, then restore the iPod in iTunes. If you want to make sure the iPod's ownership is transferred in Apple's system, just call Apple at 1-800-275-2273 and ask the customer service rep to update the registration information to the new owner's information.
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If you have itunes and a computer you should just be able to go on it on the computer and check the songs you want. If you are using and buying songs on an ipod touch they do not download onto your computer so on your computer itunes plug in your ipod touch but be sure the sync is set to download songs onto the computer. Now you plug in your ipod and check the songs you want, wait for it to sync.